Ukraine: U.S. Considering Cutting Aid

Washington, 8 May 1997 (RFE/RL) - U.S. officials said yesterday that problems of crime, corruption and slow reform in Ukraine must be dealt with or Washington will consider cutting back economic assistance to Kyiv.

Richard Morningstar, Chief Coordinator and Special Adviser to the U.S. president on assistance to the newly independent states, said that Ukraine's economic future and all it has achieved in the last few years is at risk because of the deterioration in the investment climate there.

He said if Ukraine fails to address its problems, the U.S. "will consider scaling back assistance in certain sectors where backtracking on reform has been of greatest concern."

Morningstar made the statement to the Senate Foreign Relations Committee which is considering budget allocations for foreign assistance for the 1998 fiscal year.

Another senior official, Thomas Dine from the U.S. Agency for International Development, said the World Bank is seriously considering suspending three large loans to Ukraine.

He and Morningstar said these problems will be discussed with Ukrainian president Leonid Kuchma when he comes to Washington next week. Dine said the discussion will have to be very frank and that "it will be a hardhitting session."

Ukraine gets $225 million in U.S. assistance in the current fiscal year and millions of dollars more from the World Bank and other institutions.